U.S. websites dupe hundreds of British bargain hunters with 'deals' on top-selling gadgets

Hundreds of people have been duped by two gadget websites that claim to offer massive savings on top-selling devices like Zune MP3 players, the new Sony PSP and digital cameras.

The two websites - www.bestpricedbrands.co.uk and www.bitesizedeals.co.uk - masqueraded as British when they were actually based in the US city of Los Angeles.

Bargain hunters from this country complained because the products arrived without a valid warranty and carrying huge import taxes.

Duped: Hundreds of people bought gadgets like Sony's PSP from the two U.S. based websites masquerading as British companies

In some cases, the devices were not what was ordered, they were incompatible with the UK power system or the instruction manuals were in Spanish or Chinese.

People trying to return the items to the websites, which appear to have been operating since 2006, were hit with draconian charges.

The scam is part of a growing problem with new figures from Consumer Direct showing the number of complaints about bogus and counterfeit selling on the web have almost doubled in the past year.

Now, in a landmark move the US Government's Federal Trade Commission (FTC) has obtained a temporary court order preventing the company from deceptively marketing goods to UK consumers.

However, the websites are still online and boasting of savings running to hundreds of pounds - although they now make it clear where they are based.

For example, there was a 8GB Zune digital media player at £115 compared to an official list price of £199, plus brands like Sony, Nintendo, Blackberry and Nikon.

All of the items carry prices in pounds, rather than dollars, and all claim big savings against official list prices. In fact many are no cheaper than available through stores based in the UK.

The problem of buying electronic products via American or other foreign websites is that the warranties may not be honoured in Britain if the product fails.

At the same time, US goods sent through the post carry very high import taxes which are passed on to the purchaser by customs.

The FTC said: 'Consumers in the United Kingdom were duped into purchasing goods that carried no manufacturer warranties, were misled about their rights to return or exchange goods under UK regulations, were denied the option of cancelling orders, and were sent goods that were different from those depicted on the defendants’ web sites - and in some cases were unusable.'

This is the first case the FTC, which worked in partnership with Britain's Office of Fair Trading, has brought against a US company exclusively doing business abroad.

Terry Cox, aged 49, from Stoke Poges, was let down over the purchase of a £240 Panasonic camera.

Phony: www.bitesizedeals.co.uk now states it is based in the States as does www.bestpricedbrands.co.uk (below)

'I found bestpricebrands on the web. It seemed to be a British company and was offering a good price,' he said.

'When the camera arrived, I was very unhappy about the way it had been packed. It was just stuffed in a box and I was worried it may have been damaged so I wanted to return it.

'Most of my emails to the firm were ignored. Eventually, they agreed to take it back but only on the basis that they kept 20 per cent of the purchase price.'

Mr Cox, a cargo agent at Heathrow airport, said: 'I had no idea it was coming from America. That meant the warranty was not valid. At the same time I could have been hit with a big import tax bill.'

Retired merchant navy catering officer Raymond West, from Kent, was tempted to one of the websites by a £200 saving on a Panasonic Lumix camera.

'I knew the model I wanted and so did an internet search. A number of sites came up, including bestpricedbrands which was selling the camera for around half the normal price.

'I thought the British web address meant this was a UK company and so would offer all the usual protection for customers.'

Within one hour of the initial order, he decided to change to a higher specification version of the same camera and sent the firm an email.

'I didn't get any kind of response despite repeated attempts. I feared I had lost my money completely,' he said.

Eventually, some two months later, the camera ordered originally turned up. However, it does not have a valid warranty.

OFT director of consumer protection, Mike Haley, said: 'It is important that companies give consumers clear information, including up most transparency about where they are based to ensure informed purchases online.

'Prompted by complaints from UK consumers, this landmark legal action shows how international authorities are working closely and we will continue to share intelligence and take action where consumers are potentially misled.'

The company behind the websites is called Balls of Kryptonite, which is run by Jaivin Karnani.

In papers lodged with the courts, Mr Karnani said the company's US base is identified on its website.

He denies engaging in deceptive business practices, stating that purchasers have asked banks to deny payment for fewer than 1 per cent of transactions.

He said refunds are offered where products are incompatible with the UK power system.

The US courts will decide whether the temporary injunction should be extended to close down the websites permanently.